Case 006 - Compound Functions and Quotients of Functions
Price Elasticity of Demand is a common economics concept that can be used to determine a relationship between consumers and prices. Using the formula, one can find if the good is Unit Elastic (consumer sensitivity to changes in prices will decrease dales, however, revenue will remain the same), Price Inelastic (consumers are not sensitive to price changes, thus, increasing prices will raise revenue), or Price Elastic (consumers are sensitive to price changes, thus, increasing prices will lower revenue).
The formula to determine the Price Elasticity of Demand is the Percent Change in Quantity Demanded divided by the Change in Price.
Case 006 - Compound Functions and Quotients of Functions
Price Elasticity of Demand is a common economics concept that can be used to determine a relationship between consumers and prices. Using the formula, one can find if the good is Unit Elastic (consumer sensitivity to changes in prices will decrease dales, however, revenue will remain the same), Price Inelastic (consumers are not sensitive to price changes, thus, increasing prices will raise revenue), or Price Elastic (consumers are sensitive to price changes, thus, increasing prices will lower revenue).
The formula to determine the Price Elasticity of Demand is the Percent Change in Quantity Demanded divided by the Change in Price.